ASST. C.I.T., CENTRAL CIRCLE-9, MUMBAI V. SHRI. KAUSHAL M. PUROHIT, MUMBAI

ITA 4416/MUM/2008

• Counselvise Citation: 441619914 RSA 2008
• Duration Of Justice: 3 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 03-08-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 27-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOLI SRINIWAS RAO
• Assessee Lawyers: LATA PARULEKAR
• Keywords: Gift; Search and seizure; Scheme of amalgamation; Benefit of exemption; Set aside
• Section: 143(3); 54F; 153A; 250; 131; 6; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER I.T.A. NO. 4416, 4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. ASSTT. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-9, MUMBAI. : APPELLANT. VS. 1. KAUSHAL M. PUROHIT, : FLAT NO.2, 43 RD FLOOR, SHREEPATI ARCADE, : NANA CHOWK, A.K.MARG, MUMBAI-400036. : AGNPP 7683G 2. TEJAL K. PUROHIT, : FLAT NO. 4 & 5, 43 RD FLOOR,SHREEPATI ARCADE, : RESPONDENTS NANA CHOWK,A.K. MARG, MUMBAI-400036. : PAN AEFPB 0853B : 3. MAHENDRAKUMAR N. PUROHIT, : 7/8, OFFICE PREMISES, 5/17, RAGHAVJI BLDG., : RAGHAVJI ROAD, GOWALIA TANK, : MUMBAI 400036. : PAN AAXPP 3867L APPELLANT BY : SHRI GOLI SRINIWAS RAO. RESPONDENT BY : MISS LATA PARULEKAR. DATE OF HEARING : 03-08-2011. DATE OF PRONOUNCEMENT : 30-09-2011. O R D E R. PER P.M. JAGTAP, A.M. : THESE THREE APPEALS PREFERRED BY THE REVENUE AGAIN ST THREE SEPARATE ORDERS PASSED BY THE LEARNED CIT(APPEALS), CENTRAL-VII, MU MBAI INVOLVE A COMMON ISSUE 2 ITA NOS.4416,4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. AND THE SAME, THEREFORE, HAVE BEEN HEARD TOGETHER A ND ARE BEING DISPOSED OF BY A SINGLE COMPOSITE ORDER FOR THE SAKE OF CONVENIENCE. 2. THE SOLITARY COMMON ISSUE INVOLVED IN THESE APPE ALS IS WHETHER THE CIT(APPEALS) WAS RIGHT IN TREATING THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES AFFECTED BY THE ASSESSEE AS GENUINE TRANSACTIONS AN D ALLOWING EXEMPTION CLAIMED BY THE ASSESSEE U/S 54F IN RESPECT OF LONG TERM CAP ITAL GAIN ARISING FROM THE SAID TRANSACTIONS. 3. AS THE ISSUE INVOLVED IN ALL THESE THREE CASES A S WELL AS THE MATERIAL FACTS RELEVANT THERETO AS INVOLVED THEREIN ARE SIMILAR AN D EVEN THE ORDERS PASSED BY THE AO AS WELL AS BY THE LEARNED CIT(APPEALS) ARE ALMOS T IDENTICAL, WE TAKE UP THE CASE OF SHRI KAUSHAL M. PUROHIT FOR REFERENCE FOR T HE PURPOSE OF DECIDING ALL THE THREE CASES. 4. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L. DURING THE YEAR UNDER CONSIDERATION, HE HAD SOLD HIS 2,15,000 SHARES IN M /S LEE & NEE SOFTWARE (EXPORTS) LTD., CALCUTTA FOR TOTAL CONSIDERATION OF RS.64,50,000/-. THE SAID SHARES WERE ALLOTTED TO THE ASSESSEE IN LIEU OF HIS HOLDIN G OF 250 EQUITY SHARES OF RS.100/- EACH OF THE COMPANY NAMED M/S L.T. ESTATES PVT.LTD. , CALCUTTA. THE SAID COMPANY WAS AMALGAMATED WITH M/S LEE & NEE SOFTWARE (EXPORTS) LTD. AS PER THE ORDER DATED 18-09-2002 PASSED BY THE HONBLE CA LCUTTA HIGH COURT WITH EFFECT FROM 28-02-2000. AS PER THE SCHEME OF AMALGAMATION, THE ASSESSEE RECEIVED THE SHARES IN THE RATIO OF 1:860 NUMBERING TO 2,15,000 OF M/S LEE & NEE SOFTWARE (EXPORTS) LTD. THE SHARES SO RECEIVED WERE SOLD BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION FOR RS.64,50,000/- AND THE ENTIRE LON G TERM CAPITAL GAIN ARISING FROM THE SAID SALE WAS CLAIMED TO BE EXEMPT BY THE ASSES SEE U/S 54F ON ACCOUNT OF INVESTMENT MADE IN PURCHASE OF RESIDENTIAL HOUSE IN THE RETURN ORIGINALLY FILED. IN 3 ITA NOS.4416,4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. THE ASSESSMENT COMPLETED U/S 143(3) THE TRANSACTION S OF PURCHASE AND SALE OF SHARES GIVING RISE TO THE LONG TERM CAPITAL GAIN WERE TREA TED BY THE AO AS NOT GENUINE AND REJECTING THE CLAIM OF THE ASSESSEE FOR EXEMPTION U /S 54F, THE ENTIRE SALE PROCEEDS OF THE SHARES AMOUNTING TO RS.64,50,000/- WERE BROU GHT TO TAX BY HIM IN THE HANDS OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER S OURCES. VIDE ITS ORDER DATED 07-12-2005 PASSED IN ITA NO. 93/MUM/2005, THIS ISSU E, HOWEVER, WAS RESTORED BY THE TRIBUNAL TO THE FILE OF THE AO FOR DECIDING THE SAME AFRESH. MEANWHILE A NOTICE U/S 153A CAME TO BE ISSUED BY THE AO ON 09-09-2005 IN CONSEQUENCE OF A SEARCH AND SEIZURE ACTION CONDUCTED IN THE CASE OF THE ASS ESSEE U/S 132 ON 23-03-2005. AS A RESULT OF THE SAID NOTICE, THE ASSESSMENT PROCEED INGS SET ASIDE BY THE TRIBUNAL FOR THE YEAR UNDER CONSIDERATION GOT ABATED AND THE FRE SH ASSESSMENT PROCEEDINGS WERE TAKEN UP BY THE AO U/S 143(3) READ WITH SECTION 153 A. 5. DURING THE COURSE OF PROCEEDINGS U/S 153A READ W ITH SECTION 143(3), THE CLAIM OF THE ASSESSEE FOR LONG TERM CAPITAL GAIN AR ISING FROM SALE OF SHARES OF M/S LEE & NEE SOFTWARE (EXPORTS) LTD., AND EXEMPTION IN RESPECT THEREOF U/S 54F WAS EXAMINED BY THE AO AFRESH AND ON SUCH EXAMINATION, HE FOUND THE SAID CLAIM OF THE ASSESSEE TO BE NOT ACCEPTABLE FOR THE FOLLOWING REASONS GIVEN IN THE ASSESSMENT ORDER : (I) . IN ADDITION TO THE MATTER DISCUSSED BY THE A .O. IN HIS ORDER DATED 21-3- 2003, FURTHER ENQUIRIES WERE CONDUCTED BY RECORDING THE STATEMENT OF THE DIRECTOR OF -MIS. LEE & NEE SOFTWARE ( EXPORT ) LTD . VIZ. SAGARMAL RAMESHWARLAL GUPTA, UNDER SEC.131 ON19-4-2007.RAND IN ANSWER TO QUESTION NO.11, HE HAS STATED THAT HE DID NOT KNOW THE SSESS EEEXCPT THE SHAREHOLDER- OF THE COMPANY. THIS IS NOI:CORRCCT AS THE ASSESSEE GROIP I.E .M/S. SHREEPATI COMIUTER CENTRE HAD ALREADY ENTERED INTO AN AGREEME NT WITH M/S. LEE & NEE - SOFTWARES (EXPORTS) LTD. FOR DEVELOPMENT OF SOFTW ARE. - 4 ITA NOS.4416,4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. II) FURTHER A STATEMENT OF SHRI.NAVEENCHANDRA S.SHA H PROP. OF M/S. GNS ENTERPRISES, A SUB- BROKER THROUGH WHOM THE SHARES OF M/S.L.T.ESTATE PVT. LTD WERE PURCHASED ON 26-9-1999, WAS RECORDED U/S. 131 ON 17-4-2007, WHO HAVE STATED THAT THE ASSESSEE HAD PURCHASED 250 SHA RES OF L.T.ESTATE PVT. LTD. BUT IN ANSWER TO QUESTION NO.5, HE HAS REPLIED THAT HE DID NOT KNOW THE ASSESSEE PERSONALLY. HE ALSO COULD NOT GIVE ANY DET AILS OR EVIDENCE FOR HAVING RECEIVED AMOUNT FROM THE ASSESSEE. HE ALSO C OULD NOT GIVE ANY CONCRETE EXPLANATION REGARDING HOW THE VALUE OF THE SHARES OF M/S. L.T. ESTATE PVT. LTD. WAS DETERMINED. III) THE ASSESSEE HAS FILED THE CONTRACT NOTE FOR T HE PURCHASE OF 250 ORIGINAL EQUITY SHARES OF L.T. ESTATE PVT. LTD. ON WHICH BIL L NO. MENTIONED IS 11-9- 1999, WHICH IS DATE ITSELF, DATE MENTIONED THEREIN IS 28-9-1999 AND 250 SHARES AT THE RATE OF 101.50 AND THERE IS NO MENTIO N OF BROKERAGE. AGAINST THIS PURCHASE OF SHARES THE ASSESSEE HAS MADE PAYME NT OF RS.10,000I- IN CASH ON 29-8-1999 AND RS.15,000/- BY CHEQUE ON 23-2 -2000 AND THE 250 SHARES HAVE BEEN REGISTERED ON 20-8-2000, WHEREAS T H.AR OF AMALGAMATION ORDER PASSED BY THE KOLKATTA HIGH COURT IS 18-9-200 0, WHICH IS EFFECTIVE FROM 28-2-2000 AND RECEIVED BY THE ASSESSEE ON 28-9 -2000. NOR1T. K OF SHARES THAT TOO OF PVT. LTD. COMPANIES ARE NEVER SO LD ON CREDIT BASIS. THE I .T ESTATE PVT. LTD. VIDE ITS LETTR DATED 20-11-2000 H AVE FORWARDED 2,15,000 SHARES OF LEE & NEE SOFTWARE (EXPORTS) LTD. TO THE ASSESSEE, WHEN L.T. ESTATE PVT. LTD. WAS NOT IN EXISTENCE AT ALL ON TH IS DATE. THE ASSESSEE HAS SOLD THE SHARES ON 29-9-2000 ARID 5-10-2000 I.E. PR IOR TO PHYSICALLY GOT THEM VIDE LETTER DATED 20-11-2000. THE BROKER AND THE BU YERS ARE OF THE SAME GROUP CONCERNS AND NO MONEY WAS PAID BY THEM AT THE TIME OF PURCHASE. WHEN THE FIRST PAYMENT WAS MADE ON 27-12-2000 OF RS . 10,00,000/-, THE MAXIMUM AND MINIMUM SALE. QUOTATION OF LEE & NEE SO FTWAR ( EXPORT ) LTD. WAS BETWEEN RS.14.70 TO RS.19.00 PER SHARE AND IN THE MONTH OF JAN UARY,200 1 AT 12.15 TO 15.19 PER SHARE. THESE ARE T HE FACTS ON RECORD, WHICH CLEARLY - CONCLUDES THAT THE TRANSACTIONS THE SALE OF SHARES IS JUST AFTER THE AMALGAMATION ORDER WAS RECEIVED AND IS AN ACCMMODA TION ENTRY ONLY. THUS THE ENTIRE TRANSACTION WAS -A SHAM TRANSACTION TID THE DEAL WAS COMPLETED PRIVATELY WITHOUT ROUTINE THROUGH- THE STOCK EXCH GE, WHICH ATTRACTS THE 5 ITA NOS.4416,4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. PRINCIPALS OF THE DOCTRINE OF HUMAN PROBABILITIES A S HELD BY THE HONBLE SUPREME COURT IN THE CASE SUMITI DAYAL (214 ITR 801 ). IV) THE HONBLE LD.CIT(A) VIDE APPELLATE ORDER NO.CJT(A)XVH/JT.CIT17(1)/LT.LO/03- 04 DATED 26-10-2 004 IN THE CASE OF THE ASSESSEE MR. KAUSHAL M. PUROHIT FOR A.Y. 2001-0 2 HAVE ALSO CONFIRMED THE NON-GENUINENESS OF THE SHARE TRANSACTIONS AND T HESE ARE IN THE NATURE OF ANTEDATED ACCOMMODATION TRANSACTIONS. IN VIEW OF TH E ABOVE FACTS AND THE DETAILED DISCUSSION MADE BY THE A.O. IN THE ASSESSM ENT ORDER DATED 21-3- 2003 IN THE CASE OF ASSESSEE MR. KAUSHAL M. PUROHIT CLAIM OF LONG TERM CAPITAL GAIN AND SETTING IT OFF AGAINST THE PURCHA SE OF FLATS IS REJECTED AND AN AMOUNT OF RS.64,50,000I- IS BROUGHT TO TAX AS INCO ME FROM OTHER SOURCES. THEREFORE THE CLAIM OF THE ASSESSEE OF LONG TERM CA PITAL GAIN AND SETTING IT AGAINST THE PURCHASE OF FLAT IS REJECTED AND AMOUNT RECEIVED BY THE ASSESSEE OF RS.64,50,000/- IS BROUGHT TO TAX AS INCOME FROM OTHER SOURCES. FOR FURNISHING INACCURATE PARTICULARS OF INCOME, PENAL PROCEEDINGS U/S.271(1) (C) ARE SEPARATELY INITIATED. FOR THE REASONS GIVEN ABOVE, THE CLAIM OF THE ASSES SEE FOR EXEMPTION U/S 54F WAS DISALLOWED BY THE AO AND TREATING THE RELEVANT TRAN SACTIONS OF PURCHASE AND SALE OF SHARES AS NOT GENUINE, THE ENTIRE SALE PROCEEDS OF SHARES AMOUNTING TO RS.64,50,000/- WERE BROUGHT TO TAX BY HIM IN THE HA NDS OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES. 6. AGAINST THE ORDER PASSED BY THE AO U/S 153A READ WITH SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LEA RNED CIT(APPEALS) AND FOLLOWING SUBMISSIONS WERE MADE ON BEHALF OF THE AS SESSEE BEFORE THE LEARNED CIT(APPEALS) IN ORDER TO MEET ALL THE OBJECTIONS RA ISED BY THE AO WHILE DISALLOWING HIS CLAIM FOR LONG TERM CAPITAL GAIN AN D EXEMPTION THEREOF U/S 54F : 6 ITA NOS.4416,4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. 3.3 EACH OF THE ISSUES DISCUSSED BY THE AO ARE DEA LT WITH HEREAFTER. I) IN PARA 10(I), THE A.O. HAS STATED THAT THE A.O. HAVING RECORDED THE STATEMENT U/S.131 OF THE INCOME-TAX ACT OF DIRECTOR , SHRI S.R. GUPTA OF M/S. LEE & NEE SOFTWARES (EXPORTS) LT1. WAS OF THE OPINI ON THAT SHRI S.R. GUPTA KNEW THE ASSESSEE GROUP AS THEY WERE DEALING WITH M IS. SHREEPATI COMPUTER CENTRE. !-LCWECR1 HIS STATEMENT, SI RI S.R. GUPTA H AS STATED THAT HE DID NOT KNOW THE APPELLANT. IT IS SUBMITTED THAT TO WHAT C ONTEXT, SHRI S.R. GUPTA HAS STATED THAT HE DID NOT KNOW THE APPELLANT V S NOT K NOWN. HOWEVER, MERE FACT THAT SHRI S.R. GUPTA HAS DEALT WITH M/S. SHREEPATI COMPUTER CENTRE WILL NOT ENABLE HIM TO KNOW ALL THE INDIVIDUAL, PARTNERS AND THE MEMBERS OF AOP OF SHREEPATI GROUP. IN THAT CASE, IT CANNOT BE ANY ISS UE WHICH WOULD COME IN THE WAY OF SATE OF SHARES BY THE APPELLANT AND THE COMP ANY/ DIRECTORS NEED NOT KNOW ALL THE SHARE TRANSACTIONS AND THE SHAREHOLDER S. THEREFORE, THE CONTENTION OF THE A.O. IN THIS SUB-PARA IS IRRELEV ANT AND SHOULD BE IGNORED. II) IN PARA 10(II), THE A.O. STATED THAT IN SPITE OF THE FACT OF THE NOTING THAT SHRI SHIVAL SHAH CATEGORICALLY STATED THAT HE HAS S OLD 500 SHARES OF M/S. L.T. ESTATES PVT, LTD. RELIED ON THE OTHER PART OF THE S TATEMENT THAT HE DOES NOT KNOW THE APPELLANT PERS.9NLLY FOR, DENYING THE TRAN SACTION. IT IS SUBMITTED THAT THE PURCHASE OF SHARES HAVE BEEN CONFIRMED, TH E IDENTITY OF THE PURCHASER IS ALSO ESTABLISHED. IT IS IRRELEVANT TO WHETHER THE APPELLANT IS KNOWN TO THE SELLER. IN VIEW OF THE ABOVE, IT IS SU BMITTED THAT THE OBSERVATION MADE BY THE A.Q. IS NOT RELEVANT FOR THE PURPOSE OF DETERMINING THE CAPITAL GAIN IN THE HANDS OF THE APPELLANT. III) IN PARA 10(III), THE A.O. HAS STATED THAT BROK ERAGE WAS NOT PAID ON THE PURCHASE OF 250 SHARES OF ORIGINAL EQUITY SHARES OF MI. L.T. ESTATE PVT. LTD. AS THE SAME WAS NOT THE PART OF BILL NO.11.9.1999. THE PAYMENT OF BROKERAGE WAS ISSUE PUT BEFORE THE SUB-BROKER AND THE SAME WA S NOT ANSWERED. IV) THE A.O. FURTHER STATED IN PARA 10(111) THAT TH E PURCHASE PRICE PAID WAS LATE AND IN SHARE TRANSACTION, NO CREDIT ALLOWED. THIS STATEMENT OF A.O. IS IRRELEVANT AS THE PAYMENT ACTUALLY MADE. V) THE A.O. FURTHER STATED THAT IN PARA 10(III), TH E APPELLANT RECEIVED SHARE OF M/S. LEE & NEE SOFT PARE (EXPORTS) LTD. WHEN M/S. L .T. ESTATE PVT LTD WAS 7 ITA NOS.4416,4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. NOT IN EXISTENCE. THIS IS NOT RELEVANT AS AFTER AMA LGAMATION, M/S. L.T. ESTATE PVT. LTD. CEASES TO EXIST. THE QUOTED RATES OF M/S. LEE & NEE SOFTWARE (EXPORTS) LTD. WAS QUOTED LESS WHEN THE FIRST PAYME NT WAS RECEIVED. THE SALE OF SHARES MADE WERE RECORDED AND PAYMENTS RECE IVED WERE ALSO ON RECORD. THEREFORE, PRESUMPTION ON THE PART OF A(). IS NOT RELEVANT. VI) THE AOS PRESUMPTION THAT THE PURCHASE OF ORIGI NAL SHARE AND SALE OF SHARES ARE ONLY PRESUMPTION AND ASSUMPTIONS NOT BAS ED ON THE FACTS OF THE CASE AND LIABLE TO BE REJECTED. VII) THE A.O. HAD CITED THE SUPREME COURT, THE ISSU E WAS THE CONTEXT OF HUMAN PROBABILITIES IN THE GIVEN CASE. IN THE CASE OF SUMATI DAYAL [214 ITR 801 (SC), THE ISSUE WAS OF KNOWLEDGE OF THE HORSE R ACE AND WHETHER THE LADY IN QUESTION DID PURCHASE THE WINNING COUPON. IT IS SUBMITTED THAT ON THE FACTS OF THE CASE ITSELF, THE A.OS CONTENT ON SHOULD BE REJECTED AS THE PURCHASE OF ORIGINAL SHARES WERE CONFIRMED BY.TH SELLER AND RE CEIPT OF THE AMALGAMATED COMPANY SHARES WERE NOT IN DISPUTE A. WELL AS THE F INAL SALE OF SHARES IN THE CASE UNDER CONSIDERATION. THEREFORE, THE OBSERVATIO N MADE BY THE AC. IN (IV) IS NOT CORRECT AND SHOULD BE IGNORED. VIII) THE A.O.S OBSERVATION IN PARA 10(IV) THAT LE ARNED CIT(A) HAS COR3FLRMED THE NON-GENUINENESS OF SHARE TRANSACTION S IS IRRELEVANT AS ITAT HAS SET ASIDE THE A.O,S AS WELL S CIT(A)S ORDER. AFTER SETTING ASIDE OF THE A.OS AND CIT(A)S ORDER, FRESH ENQUIRIES S WERE MA DE AND ON THE BASIS OF THE SAME, THE DECISIONS SHOULD BE TAKEN WITHOUT PRE FERENCE TO LEARNED CIT(A)S ORDER. IN ADDITION TO THE ABOVE SUBMISSIONS, RELIANCE WAS ALSO PLACED ON BEHALF OF THE ASSESSEE ON THE DECISION OF THE TRIBUNAL IN THE CAS E OF SMT. VEENA R, CHATURVEDI (ITA NO.9609/M/2004) WHEREIN A SIMILAR ISSUE INVOLV ING IDENTICAL FACTS AND CIRCUMSTANCES WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. 7. AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE IN THE LIGHT OF MATERIAL AVAILABLE ON RECO RD AND RELYING ON THE DECISION OF THE TRIBUNAL IN THE CASE OF SMT. VEENA R, CHATURVED I (SUPRA) WHEREIN A SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE, THE LE ARNED CIT(APPEALS) TREATED THE 8 ITA NOS.4416,4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. TRANSACTIONS OF PURCHASE AND SALE OF SHARES GIVING RISE TO LONG TERM CAPITAL GAIN TO THE ASSESSEE AS GENUINE AND ALSO ALLOWED EXEMPTION U/S 54F CLAIMED BY THE ASSESSEE IN RESPECT OF THE SAID LONG TERM CAPITAL G AIN FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 4 TO 4.6 OF HIS IMPUGNED ORD ER : 4. I HAVE CAREFULLY CONSIDERED THE ABOVE FACTS AND FIND SUFFICIENT FORCE IN THE CONTENTION OF THE APPELLANT BOTH WITH REGARD TO THE CLAIM OF LONG TERM CAPITAL GAINS AND THE EXEMPTION CLAIMED U/S 54F OF THE ACT. THE ASSESSING OFFICER HAS NOT GIVEN ANY ADVERSE FINDING REGARDING THE MERITS OF THE CLAIM FOR EXEMPTION. THE ISSUE CONSIDERED IN DEPTH PERTAI NED TO THE QUESTION REGARDING APPLICABILITY OF THE PROVISIONS OF CAPITA L GAINS OR OTHER SOURCES WITH REGARD TO THE SALE OF THE SHARES. 4.1 AS EVIDENT FROM THE CONTENTIONS OF THE APPELLAN T REPRODUCED ABOVE CONTESTING EACH AND EVERY OBSERVATION AND FINDING O F THE ASSESSING OFFICER, THE ACTION OF THE ASSESSING OFFICER DOES NOT APPEAR TO BE JUSTIFIED ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE. THE CONCL USION DRAWN BY THE ASSESSING OFFICER TO SHOW THAT THE ENTIRE TRANSACTI ON WAS SHAM WITH THE SOLE INTENTION OF CLAIMING EXEMPTION U/S 54F HAS BEEN SU CCESSFULLY REBUTTED BY THE APPELLANT AS PER THE ABOVE SUBMISSIONS. 4.2 FROM THE FOREGOING FACTS) IT IS EVIDENT THAT TH E SHARES UNDER CONSIDERATION WERE PURCHASED AND SUCH A FACT HAS NOT BEEN DENIED BY THE ASSESSING OFFICER. THE PURCHASE OF SHARES HAS BEEN CONFIRMED, THE IDENTITY OF THE PURCHASER IS ALSO ESTABLISHED. IT IS IRRELEVANT AS TO WHETHER THE APPELLANT IS KNOWN TO THE SELLER OR NOT. THU S, THE PURCHASES RE MAIN UNDISPUTED EVEN FROM THE ANGLE OF THE ASSESSING OFFICER 4.3 NOW COMING TO THE SALES OF SUCH SHARES SUBSEQUE NT TO THEIR COMAS A RESULT OF AMALGAMATION OF THE ORIGINAL COMPANY IN L EE AND NEE SOFTWARES, THE ASSESSING OFFICER HAS DOUBTED THE GENUINENESS O F THE SAID TRANSACTIONS. HOWEVER, THE OBSERVATIONS MADE BY. HIM IN TREATING SUCH TRANSACTIONS AS 9 ITA NOS.4416,4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. NON-GENUINE ARE VERY MUCH SUPERFICIAL AND ONLY REFL ECT HIS SUSPICION ONLY. NO CONCRETE MATERIAL OR PIECE OF EVIDENCE HAS BEEN BROUGHT ON RECORD TO SHOW THAT ENTIRE TRANSACTION WAS ORCHESTRATED FOR R EDUCING THE TAX LIABILITY. HE HAS FAILED TO APPRECIATE THE FACTS THAT THE TRAN SACTIONS WERE ENTERED INTO WITH THROUGH A BROKER ANT THE COST OF SHARES WAS AL SO COMPARABLE WITH THE CORN MARKET QUOTATIONS AS PROVIDED BY THE APPELLANT WHICH HAVE ALSO NOT BEEN REJECTED BY THE ASSESSING OFFICER. THE SALE OF SHARES MADE BY THE APPELLANT WAS RECORDED AND PAYMENTS RECEIVED WERE A LSO ON RECORD. THE AOS REMARKS THAT THE SALE OF SHARES WAS JUST AFTER THE AMALGAMATION ORDER WAS RECEIVED AND IS AN ACCOMMODATION ENTRY ONLY, IS NOT BORNE FROM ANY EVIDENCE. THE APPELLANT PURCHASED 250 SHARES OF L.T .ESTATE PVT. LTD. AND ON AMALGAMATION OF THE SAID COMPANY WITH M/S. LEE & NE E SOFTWARES (EXPORTS) LTD. RECEIVED SHARES OF 2,15,000. THE WHO LE PROCESS INVOLVED IN GETTING THE SHARES OF A NEW COMPANY CANNOT BE AN AF TER THOUGHT AS WELL AS AN ACCOMMODATION ENTRY. THERE IS SUBSTANTIAL TIME GAP IN THE DATES OF PURCHASE AND SALE OF SHARES. MOREOVER, THE ENTIRE TRANSACTIO NS APPEAR O HAVE BEEN MADE THROUGH BANKING CHANNELS. IN SUCH A SITUATION, THE ONUS IS ALL THE MORE ON THE AC TO ESTABLISH THE ALLEGATION OF SHAM TRANS ACTION AS LEVELED BY HIM AGAINST THE APPELLANT. 4.4 IN THIS CONNECTION, THE RELIANCE PLACED BY THE APPELLANT ON THE CASE OF ANOTHER FAMILY MEMBER,SMT. VEENA R. CHATURVEDI IS WORTH CONSIDERATION WHERE ON SIMILAR FACTS AND CIRCUMSTANCES, SALE OF S HARES WAS ACCEPTED AS LONG TERM CAPITAL GAIN AND DEDUCTION U/S 54F WAS AL LOWED BY HONBIE ITAT, MUMBAI. IT WAS OBSERVED BY THE TRIBUNAL THAT EVEN T HOUGH THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE MIGHT LOOK SOMEWHAT UN USUAL, STILL THERE CANNOT BE A CASE THAT SUCH TRANSACTIONS ARE IMPOSSIBLE OR IMPROBABLE. IT IS ALSO STATED THAT THE ASSESSING OFFICER DID NOT MAKE ANY MEANINGFUL ENQUIRY AND INVESTIGATION INTO THE MATTER AS HE DID NOT EXAMINE ANY OF THE PERSON INVOLVED IN THE CHAIN OF TRANSACTIONS SUCH AS THE D IRECTORS, BROKERS ETC AND DID NOT CALL FOR ANY INFORMATION FROM THOSE COMPANI ES OR THE REGISTRAR OF COMPANIES. IT IS ALSO OBSERVED THAT THE DISALLOWANC E HAS BEEN MADE BY THE ASSESSING OFFICER AS IF HIS OBSERVATION. MADE IN TH E ASSESSMENT ORDER AMOUNTED TO COGENT EVIDENCES. HE HAS NOT LEAD ANY E VIDENCE AGAINST THE SUBMISSIONS MADE BY THE ASSESSEE. PRESUMPTIONS ARE NOT EQUAL TO EVIDENCES. 10 ITA NOS.4416,4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. 4.5 IN THE PRESENT CASE, THE ASSESSING OFFICER HAS EXAMINED THE DIRECTOR OF LEE & NEE SOFTWARES WHO HAS NOT DENIED SUCH TRANSAC TION LIKEWISE, THE BROKERS INVOLVED WERE ALSO EXAMINED AND THE CONTENT IONS OF THE APPELLANT HAVE BEEN AFFIRMED BY THEM. WHILE THE SHARE BROKER SRI NAVIN CHANDRA SHIV LAL HAS AFFIRMED THE PURCHASES MADE IN THE YEAR 199 9 WITH REGARD TO SIMILAR TRANSACTIONS MADE IN THE NAME OF THE APPELLANT. THE DIRECTOR OF LEE AND NEE SOFTWARES SRI S.R.GUPTA HAS ALSO AFFIRMED SHAREHOLD ING OF SUCH PERSONS IN HIS COMPANY. NONE OF SUCH FACTS AND EVIDENCES ON RE CORD HAVE BEEN DISPUTED BY THE AU THUS, IN THIS CASE, EVEN AFTER M AKING SOME ENQUIRIES, THE ASSESSING OFFICER HAS FAILED TO BRING OUT ANY INFIR MITY OR INCONSISTENCY IN THE CONTENTIONS OF THE APPELLANT WHICH COULD H YE P ROVED THE BOGUS NATURE OF THE TRANSACTIONS. ACCORDINGLY, IT IS HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TAXING THE DISCLOSED LONG TERM CAPITA L GAINS AS INCOME FROM OTHER SOURCES. THE CONCLUSION DRAWN BY HIM IS NOTHI NG MORE THAN FIGMENT OF HIS IMAGINATION AND REPLETE WITH CONJECTURES AN D SURMISES ONLY. THERE IS ABSOLUTELY NO SUBSTANCE. HE DIRECTED TO ACCEPT THE CAPITAL GAIN AS SHOWN BY THE APPELLANT. 4.6 IN SO FAR AS THE CLAIM FOR EXEMPTION U/S 54F IS CONCERNED, THERE IS NO ADVERSE FINDING BY THE ASSESSING OFFICER, PRESUMABL Y BECAUSE HE TREATED THE CAPITAL GAINS DISCLOSED AS INCOME FROM OTHER SOURCE S. HOWEVER, IN THE LIGHT OF THE DETAILED SUBMISSION MADE IN THIS REGARD, I D O NOT FIND ANY REASON TO INTERFERE WITH THE CLAIM OF THE APPELLANT AS THE RE QUISITE CONDITIONS IN THE SAID SECTION ARE DULY SATISFIED. THE AO IS DIRECTED TO A LLOW THE EXEMPTION AS PER CLAIM. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(APPEALS), THE REVENUE HAS PREFERRED THESE APPEALS BEFORE THE TRIBUNAL. 8. WE HAVE HEARD BOTH THE SIDES AND ALSO PERUSED TH E RELEVANT MATERIAL ON RECORD. AS AGREED BY THE LEARNED REPRESENTATIVES OF BOTH THE SIDES, THE COMMON ISSUE INVOLVED IN ALL THESE THREE APPEALS FILED BY THE REVENUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY T HE DECISION OF THE TRIBUNAL RENDERED IN THE CASE OF SMT. VEENA R. CHATURVEDI ( SUPRA) WHEREIN A SIMILAR ISSUE 11 ITA NOS.4416,4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESS EE IN IDENTICAL FACTS. A COPY OF THE ORDER PASSED BY THE TRIBUNAL IN THE SAID CASE I S ALSO PLACED ON RECORD BEFORE US AND A PERUSAL OF THE SAME SHOWS THAT A SIMILAR ISSU E HAS BEEN DECIDED BY THE TRIBUNAL AFTER DISCUSSING ALL THE RELEVANT ASPECTS ELABORATELY IN PARAGRAPH NO. 12 TO 26 WHICH ARE REPRODUCED HEREUNDER : 12. WE CONSIDERED THE MATTER IN DETAIL. IN FACT, T HERE ARE NO DISPUTES REGARDING THE INSTANCES OF EVENTS RELATING TO THE TRANSACTIONS INVOLVED IN THIS CASE. THE THREE COMPANIES, VIZ. MIS LTEPL RAJ ASSOC IATES PVT LTD AND M.S. BUILDERS PVT LTD WERE EXISTING COMPANIES DURIN G THE RELEVANT PERIOD OF LIME. THE ASSESSEE HAD IN FACT PURCHASED 500 EQUITY SHARES OF LTEPL. THE ABOVE THREE COMPANIES WERE LATER ON AMALGAMATED WI TH MIS L & N... THE AMALGAMATION PROCESS WAS JUDICIALLY APPROVED BY THE CALCUTTA HIGH COURT; THE SHARE ALLOTMENT RATIO WAS APPROVED BY THE SHAR EHOLDERS. AS A RESULT OF THE AMALGAMATION THE ASSESSEE HAD RECEIVED 4,30,000 SHARES. THOSE SHARES WERE SOLD. THERE ARE NO DISPUTES REGARDING THESE FA CTS. 13. THE DEFECTS POINTED OUT BY THE ASSESSING AUTHOR ITY TO DISCREDIT THE BONAF IDES OF THE ABOVE TRANSACTIONS ARE SUCH AS THAT THE PURCHASE CONSIDERATION 91 SHARES WAS PAID BY THE ASSESSEE IN INSTALMENTS AND THAT TOO LONG AFTER THE, PURCHASE OF SHARES AS WELL AS THE SALE CONSIDERATIO N OF RS.1.29R001000 WAS RECEIVED LONG AFTER THE SALE OF SHARES, ETC. IT IS THE CASE OF THE ASSESSING AUTHORITY THAT THE DELAY IN PAYMENTS IN SHARE TRAN SACTIONS WAS VERY UNUSUAL AND UNCOMMON. ANOTHER DEFECT. POINTED OUT BY THE AS SESSING OFFICER IS THAT THE ASSESSEE HAS NOT MADE PROPER HOMEWORK BEFORE PU RCHASING THE SHARES OF A PRIVATE LIMITED COMPANY OPERATING IN CALCUTTA. ANOTHER DEFECT IS THAT THE SHARES WERE NOT PURCHASED AND SOLD THROUGH STO CK EXCHANGES. . 14. THE ABOVE DEFECTS POINTED OUT BY THE ASSESSING AUTHORITY ARE NORMAL ANXIETY THAT COULD BE IN THE MIND OF AN ASSESSING O FFICER WHILE GOING INTO THE MIND BOGGLING SPEED OF ACTIVITIES CARRIED ON BY THE ASSESSEE. DURING THE RELEVANT PREVIOUS YEAR. IN PURCHASING AND DISPOSIN G OF SHARES. THE ASSESSEE PURCHASED SHARES WORTH RS.50,000, THEREAFTER THE CO MPANY GETS AMALGAMATED 12 ITA NOS.4416,4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. WITH ANOTHER PROMINENT COMPANY ENGAGED IN SOFTWARE BUSINESS; THEREAFTER THE ASSESSEE GETS A SIZEABLE NUMBER OF SHARES IN T HE AMALGAMATED COMPANY AND IMMEDIATELY THEREAFTER ALL (HOSE SHARES ARE SOL D FOR A VERY HUGE CONSIDERATION AND FINALLY THE ASSESSEE HAS MADE OUT A HUGE AMOUNT OF PROFIT IN THE NATURE OF LONG TERM CAPITAL GAIN. THIS MAY L OOK LIKE A FAIRY TALE TO A LAY MAN. 15. BUT, IS THE ANXIETY OR THE DIFFICULTY TO BELIEV E THE SPEED OF EVENTS BY ITSELF SUFFICIENT TO DISCREDIT AND DISBELIEVE THE TRANSACT ION ENTERED INTO BY THE ASSESSEE THROUGH THE MEDIUM OF NUMBER OF CORPORATE BODIES AND PERFECTLY DOCUMENTED AND PROVED BY RECORDS PRESCRIBED BY THE COMPANIES ACT ASSESSEE MIGHT HAVE THAT MUCH RESOURCEFULNESS REGAR DING ADVICE AND WISDOM TO INVEST MONEY IN SHARES AND REAP THE BENEF IT THEREFROM. EVEN THOUGH THE TRANSACTIONS ENTERED INTO BY THE ASSESSE E MIGHT BE LOOKING SOMEWHAT UNUSUAL, STILL THERE CANNOT BE A CASE THAT SUCH TRANSACTIONS ARE IMPOSSIBLE OR IMPROBABLE. 16. THE ANXIETY CAUSED IN THE MIND OF THE ASSESSING AUTHORITY SHOULD HAVE HIM FOR CONDUCTING FURTHER MEANINGFUL AND FRUITFUL ENQUIRIES. DID THE ASSESSING OFFICER EXAMINE ANY PERSON INVOLVED IN TH E CHAIN OF TRANSACTIONS? DID HE EXAMINE THE DIRECTORS OF THE PRIVATE LIMITED COMPANIES WHOSE SHARES WERE INITIALLY ACQUIRED BY THE ASSESSEE; DID HE EXAMINE THE SHARE BROKERS, WHO ARRANGED, FOR THE TRANSACTION; DID HE EXAMINE THE DIRECTORS OF L & N, EXAMINE THE BUYERS OR THE BROKER, WHO ARRANGE D FOR THE SALE OF THE SHARES, DID HE CALL FOR ANY INFORMATION FROM ANY O THER SOURCES INCLUDING THOSE COMPANIES OR BROKERS OR REGISTRAR OF COMPANIE S?.: 17. THE ANSWER FOR ALL THE ABOVE QUESTIONS IS A S IMPLE NO. IN SPITE OF A SERIES OF PROVOCATION TO DISBELIEVE THE TRANSACTI ON DETAILS FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICE HAS NOT CARRIED OUT ANY MEANINGFUL ENQUIRY. WITHOUT CONDUCTING SUCH ENQUIRIES AND COLLECTING EV IDENCE AGAINST THE EXPLANATIONS OFFERED BY THE ASSESSEE, HOW IS IT. PERMISSIBLE IN LAW TO DRAW ADVERSE CONCLUSIONS AGAINST THE ASSESSEE ONLY ON THE BASIS OF PRESUMPTIONS AND APPREHENSIONS? 13 ITA NOS.4416,4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. 18. IT IS NOT PERMISSIBLE IN LAW TO DISALLOW (HE C LAIM OF AN ASSESSEE ONLY ON THE GROUND THAT THE ASSESSING OFFICER THOUGHT THAT THE TRANSACTIONS SAID TO BE ENTERED INTO BY THE ASSESSEE WERE NOT CAPABLE OF BE ING TRANSACTED. THE ASSESSING OFFICER CANNOT INSIST THAT AN ASSESSEE S HOULD TRANSACT THE BUSINESS IN THE MODE AND MANNER CONTEMPLATED BY HIM. AS FAR AS THE ASSESSEE IS CONCERNED ALL THE TRANSACTIONS ARE SUPPORTED BY PRO PER BOOKS OF ACCOUNT, DOCUMENTS,. PAYMENT DETAILS, RECEIPTS AND OTHER SUP PORTING CORRESPONDENCE. WHEN ALL THESE EVENTS ARE PROVED TO BE FACTUAL EVEN TS ON THE BASIS OF EVIDENCES AND DOCUMENTS AND ACCOUNTS AVAILABLE WIT H THE ASSESSEE, IT IS NOT PERMISSIBLE IN LAW TO HOLD THAT ALL THE TRANSACTIO NS ARE BOGUS FOR THE REASON THAT THE ASSESSING AUTHORITY THOUGHT IT FIT TO BELI EVE THAT SUCH TRANSACTIONS ARE NOT POSSIBLE IN THE NORMAL COURSE. 19. THEREFORE; IT IS OUR CONSIDERED VIEW THAT THE A SSESSING OFFICER HAS RAISED NUMBER OF APPREHENSIONS AND PRESUMPTIONS REGARDING THE BONAFIDES OF THE TRANSACTIONS.. BUT THE ASSESSING OFFICER HAS FAILED TO TAKE ALL THESE PRESUMPTIONS AND APPREHENSIONS TO ITS LOGICAL CONCL USION AFTER MAKING NECESSARY, ENQUIRIES. THE DISALLOWANCE HAS .BEEN MA DE BY THE ASSESSING AUTHORITY AS IF THE OBSERVATIONS MADE BY HIM IN THE ASSESSMENT ORDER AMOUNTED TO COGENT IT IS NOT SO. HE HAS NOT LEAD A NY EVIDENCE AGAINST THE SUBMISSIONS MADE BY THE ASSESSEE. PRESUMPTIONS RE NOT EQUAL TO EVIDENCES. 20. THEREFORE,, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT THE ASSESSING OFFICER DOES NOT COME OUT OF THE DETA ILS AND EVIDENCES AVAILABLE ON RECORD. THE FINDING OF THE ASSESSING AUTHORITY IS BIASED, ARBITRARY AND DEVOID OF ANY FACTUAL SUPPORT. IN SUCH CIRCUMSTAN CES, THE ADDITION OF RS.1,29,00,000 IS TO BE HELD AS UNSUSTAINABLE IN L AW. THEREFORE, THE SAID ADDITION IS DELETED. 21. NEXT WE W ILL COME TO THE QUESTION OF EXEMPTIO N CLAIMED BY THE ASSESSEE U/S 54F OF THE ACT. THE LONG TERM CAPITA L GAINS WORKED OUT BY THE ASSESSEE HAS BEEN CLAIMED EMPTION FROM TAXATION ON THE GROUND THAT THE SALE PROCEEDS WERE INVESTED BY THE ASSES SEE IN THE PUR CHASE OF RESIDENTIAL FLATS ON 07-10-2001 AND 01-10-2G02 THIS CLAIM OF EXEMPTIO N HAS BEEN .TURNED DOWN BY THE LOWER AUTHORITIES ON THE GROUND THAT TH E ASSESSEE WAS ALREADY HOLDING 1/3 RD SHARE IN FLAT NO.24 AT RAGHAVJI BLDG, 15117, RGHAV JI ROAD 14 ITA NOS.4416,4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. GOWALIA TANK, MUMBAI AT THE TIME OF PURCHASE OF THO SE TWO FLATS. AS THE ASSESSEE WAS ALREADY OWNING A RESIDENTIAL PROPERTY AT THAT TIME, THE LOWER AUTHORITIES HELD THAT THE ASSESSEE CANNOT CLAIM EXE MPTION ULS 54F. 22. THE ASSESSEE EXPLAINED THAT THE SHE WAS IN FACT HOLDING 1/3 RD INTEREST IN FLAT NO. NO.24 AT RAGHAVJI BLDG. 15/17, RAGHAVJI R OAD GOWALIA TANK, MUMBAI BY VIRTUE OF HOLDING 5 SHARES IN THAT SOCIE TY. SHE HAD GIFTED AWAY HER 1/3 RD SHARE IN THOSE SHARES OF THE SOCIETY AND FLAT TO HER MINOR DAUGHTER ON 18-04-2000. THEREFORE, ACCORDING TO THE ASSESSEE , AS ON THE DATE WHEN INVESTMENTS IN NEW RESIDENTIAL PROPERTIES WERE MADE BY THE ASSESSEE ON 07- 12-2001 AND 01-10-2002, THE ASSESSEE WAS NOT OWNING ANY RESIDENTIAL HOUSE. THE ASSESSEE ALSO EXPLAINED THAT THE GIFT DEED WAS REGISTERED ON 27-03-2003 AFTER PAYING APPROPRIATE STAMP DUTY. THE GIFT DEED HAVING BEEN REGISTERED SUBSEQUENT TO THE GIFT DOES OPERATE FROM THE DAY OF GIFT ONWARDS. THE ASSESSEE HAS PLACED RELIANCE ON THE FULL BENCH DECI SION OF THE GQJARAT HIGH COURT IN THE CASE OF CIT VS. MORARMASJI MANCHANDAN I 250 ITR 542 AND THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF GURUBA X SINGH VS KRTAR SINGH & OTHERS 254 ITR 112. 23. BUT ALL THE CONTENTIONS OF THE ASSESSEE HAVE B EEN TURNED DOWN BY THE LOWER AUTHORITIES MAINLY ON THE GROUND THAT THE GI FT CANNOT BE ACCEPTED AS IT WAS NOT MADE THROUGH A REGISTERED DOCUMENT AT THE TIME OF MAKING THE GIFT AND, THEREFORE, AL THE TIME OF PURCHASE OF THE NEW FLAT THE ASSESSEE WAS HOLDING 1/3 RD SHARE IN THE RESIDENTIAL PROPERTY. . . 24. THE ASSESSEE WAS HOLDING 1/3 RD RIGHT IN FLAT NO. NO.24 AT RAGHAVJI BLDG, 15117, .RAGHAVJI ROAD GOWALIA TANK, MUMBAI. IT WAS IN FACT GIFTED BY THE ASSESSEE TO HER MINOR DAUGHTER LATEST BY THE DEED REGISTERED ON 23-07-2003. BUT THE SHARES WERE ACTUALLY TRANSFERRED ON 18-04-2 000 ITSELF. THE LOWER AUTHORITIES HAVE OVERLOOKED AN IMPORTANT POINT THAT IN, BOMBAY IN RESPECT OF RESIDENTIAL FLATS OWNED BY A PERSON IN HOUSING COOP ERATIVE SOCIETIES1 (HE TRANSFER OF PROPERTY IS EFFECTIVE IMMEDIATELY ON TR ANSFER OF THE SHARES IN THE SAID SOCIETY. WHEN A PERSON TRANSFERS HIS SHAR3S A. HOUSING SOCIETY, WHICH REPRESENTS HIS RIGHT IN A FLAT, THE FLAT ITSELF GET S TRANSFERRED. THEREFORE, WHEN THE ASSESSEE HAD IN FACT TRANSFERRED HER SHARES III THE SOCIETY IN THE NAME OF HER MINOR DAUGHTER, FOR ALL PRACTICAL PURPOSES THE, SAID RESIDENTIAL FLAT IN THE 15 ITA NOS.4416,4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. CO. OPERATIVE HOUSING SOCIETY HAS BECOME THE PROPER TY OF HER MINOR DAUGHTER. THEREFORE, IT IS TO BE SEEN THAT THE GIFT HAS BEEN EXECUTED BY THE ASSESSEE ON. 18-04-2000. THE NEW FLATS WERE PURCHAS ED BY THE ASSESSEE THEREAFTER. THEREFORE, IT IS OBVIOUS THAT AT THE TI ME OF PURCHASE OF NEW. FLATS, THE ASSESSEE WAS NOT HAVING ANY RESIDENTIAL PROPERT Y OF HER OWN. 25. TO MAKE THE MATTER MORE CLEAR, THE ASSESSEE HAD IN FACT REGISTERED DEED OF GIFT ON 27-03-2003 AFTER PAYING APPROPRIATE STAM P DUTY. AS HELD BY THE SUPREME COURT IN THE CASE OF GURUBAX SINGH VS. KART AR SINGH & OTHERS 254 ITR 112 AND FULL BENCH OF GUJARAT HIGH COURT IN THE CASE OF CIT .VS MORMSJI 250 ITR 542, THE GIFT BECOMES EFFECTIVE NOT FROM TH DATE OF THE DOCUMENT BUT FROM THE DATE OF EXECUTION ITSELF AS IN THE PRESENT CASE THE EXECUTION WAS MADE AT THE TIME OF TRANSFER OF SHARE S IN THE COOPERATIVE SOCIETY, THE SUBSEQUENT REGISTRATION OF DEED OPERAT ES FROM THE DAY OF GIFT ITSELF. 26. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF TH E CASE WE FIND THE ASSESSEE IS ENTITLED FOR THE BENEFIT OF EXEMPTION A VAILABLE U/S 54F. 27. THE ASSESSING AUTHORITY IS, THEREFORE, DIRECTE D TO GRANT THE BENEFIT OF SECTION 54F TO THE ASSESSEE. AS THE COMMON ISSUE INVOLVED IN THE PRESENT CASES AS WELL AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THE CASE OF SMT. VE ENA R. CHATURVEDI, WE RESPECTFULLY FOLLOW THE DECISION OF THE TRIBUNAL RE NDERED IN THE SAID CASE AND UPHOLD THE IMPUGNED ORDERS OF THE LEARNED CIT(APPEA LS) TREATING THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES GIVING RISE TO THE L ONG TERM CAPITAL GAINS IN THE HANDS OF THE ASSESSEES TO BE GENUINE AND ALLOWING THE CLAIM OF THE ASSESSEES FOR EXEMPTION U/S 54F IN RESPECT OF LONG TERM CAPITAL G AIN ARISING FROM THE SAID TRANSACTIONS. 16 ITA NOS.4416,4417&4418/MUM/2008 ASSESSMENT YEAR : 2001-02. 9. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 0 TH SEPT., 2011. SD/- SD/- (R.S. PADVEKAR) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 30 TH SEPT., 2011. WAKODE COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, H-BENCH. 6. GUARD FILE. (TRUE COPY ) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI.